Articles & Updates

Senate Bill 7 Passes

by Robert J. Wulff
Senate Bill 7 (“SB 7”) has passed and has been sent to the Governor for signature. We believe the Governor will sign it into law.  SB 7 makes significant changes to joinder and venue issues in Missouri.  

Missouri has long been known to liberally allow Plaintiffs, with no connection to the state of Missouri, to join with resident Plaintiffs in pursuing mass toxic tort claims against nationwide corporate Defendants.  The most notable of these claims are the talc powder lawsuits against Johnson & Johnson. SB 7 provides that claims which arise out of separate purchases of the same product or service shall no longer be sufficient to allow a Plaintiff to join with any other Missouri resident Plaintiff asserting that their claims arise out of the same transaction, occurrence, or series of transactions or occurrences to justify the joinder.  The attempt of SB 7 is to preclude thousands of out-of-state Plaintiffs from joining resident Plaintiffs in lawsuits in the liberal venues of the City of St. Louis and Jackson County.

The venue change is also significant and will have an effect on those clients of ours in the liability insurance arena.  SB 7 provides that domestic (Missouri) insurance companies are deemed, for venue purposes, to reside where its registered office is located.  Foreign insurance companies (those which are not Missouri insurance companies) are deemed to reside where its registered office is maintained (most probably Cole County).  For those foreign insurance com-panies which do not maintain a registered office in any county in Missouri, they are likewise deemed to reside in Cole County.

SB 7 then goes on to provide that where there is any count in a lawsuit, whether arising out of tort or contract, alleging breach of contract, bad faith, or breach of fiduciary duty that venue is to be where the insurance company resides.  In essence, this provision of SB 7 will re-move bad faith lawsuits, which are prevalent in the State of Missouri, to be filed in Cole County (Jefferson City). 

SB 7 makes clear that this new venue provision does not apply to uninsured motorist or underinsured motorist coverages and any vexatious refusal to pay claims.  Those UM and UIM claims are still to be brought where the accident occurred in the State of Missouri. Thus, when any insurance carrier is subject to an uninsured or underinsured motorist claim and then the companion vexatious refusal to pay claim venue is still going to be appropriate where the accident occurred and not in Cole County.  This seemingly should be no big deal because the vexatious refusal to pay claims are capped by statute at basically a 10% penalty plus attorney’s fees and do not have the unlimited, punitive damage exposure of bad faith claims.

Another interesting provision of SB 7 which deals with injuries occurring outside the state of Missouri is that venue has been modified, with regard to an individual, when there is any count which alleges that an employee committed a tortious act within the scope and course of his employment with a co-defendant corporation.  In other words, when there is a tort claim against a corporation and a companion tort claim against an employee alleging that the employee did something “wrong” within the scope and course of his employment of that corporation.  In such scenarios, the employee’s residence is not where he or she lives but where the corporation is lo-cated.  This provision seemingly gives no benefit, for example, to the Plaintiff joining an em-ployee who lives in St. Louis (to establish City of St. Louis venue) when the corporation resides in St. Charles County as the employee’s residence will not be sufficient for establishing venue.  For injuries which have occurred within the State of Missouri venue would still be appropriate at the place of the accident.

One other interesting aspect of SB 7 is that if we file a motion to transfer venue under this new statute and the trial court denies that motion and later an adverse judgment results (“bad verdict”), on appeal, we no longer have to show any prejudice from the denial of the motion to transfer in order to get the judgment reversed.  

SB 7 applies to all actions filed after February 13, 2019 so they should apply to all future lawsuits that you see assuming Governor Parson signs the bill.